Shilling firm amid steady dollar supply

US dollars held against a currency exchange rate board at a forex bureau in Nairobi. FILE PHOTO | NMG

The shilling was steady against the dollar Wednesday on the back of even greenback demand and supply, while signs of tightening liquidity following a sustained regulator mop-up also offered support.

Commercial banks quoted the local currency at an average of 103.90 in early afternoon interbank trading, little changed from Tuesday’s closing average of 103.86.

The shilling is also coming off the end month period when dollar demand is usually amplified by importers looking to settle overseas obligations.

“Market players witnessed subdued activity in the local forex counters, as dollar demand continued to grip the market and absorb any supply, keeping volatility at a minimum,” said Commercial Bank of Africa in a treasury note.

The CBK has also been mopping up large amounts in excess liquidity from the market in recent days, which has helped keep volatility low.